Take-home pay falls almost 5% in December, capping off dismal year, index shows

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  • The BankservAfrica Take-Home Pay Index shows that SA's nominal salaries fell 4.8% in December, while in real terms - which accounts for inflation - average salaries fell 6.9% in 2022.
  • The fall in December came despite over 200 000 new jobs, suggesting they are likely to have been seasonal temporary jobs added for the festive season.
  • While the data shows that nominal salaries lagged inflation, indicating an erosion of purchasing power for the average South African, pensioners managed to fare better.
  • For more financial news, go to the News24 Business front page.

South Africans' average take home pay declined almost 5% in December, ending a dismal year at a low point, with signs that record load shedding and rampant inflation took its toll on households, Africa's largest automated clearing house BankservAfrica said on Wednesday.

Average pay, as measured in BankservAfrica's Take-home Pay Index, slipped to R14 663 in December, when more than 200 000 new jobs were added, probably reflecting the fact that many new jobs are likely to have been created in lower-income categories, the firm said.

The index reflects the trend in almost 4 million monthly salary payments, which represents about 37% of all non-farm employees, or formal sector staff, in SA's labour market. For 2022, the average nominal take-home pay came to R15 055 per month compared to R15 166 in 2021, thus basically moving sideways.

BankservAfrica said data was showing that income growth was lagging behind inflation, which had reached a 13-year high in 2022. This is confirmed by data that reflected a 6.9% year-on-year decline in the real average salary recorded in 2022, compared to 2021.

"This reflects a notable erosion of South Africans' purchasing power, a trend that filtered through to lacklustre consumption expenditure by households in 2022," independent economist Elize Kruger said in a statement.

"The ongoing energy supply problems, in addition to elevated input costs, rising interest rates and increasingly higher wage demands, are placing downward pressure on company profits and margins. Furthermore, a less favourable global economic backdrop adds to the economic challenges for many sectors," Kruger said.

BankservAfrica's head of stakeholder engagements, Shergeran Naidoo, said that more positively, the firm's Private Pensions Index (BPPI) rose to R10 016 in December in nominal terms, showing a 7.2% year-on-year growth.

"The average nominal BPPI in 2022 came to R9 982, also 7.2% up on the 2021 average. In real terms, the average real private pension in 2022 was R9 576, 0.3% higher than a year earlier, as such preserving the purchasing power of pensioners," he said.

The data also shows that employment levels have picked up, a trend shown by recent StatsSA data, though playing catch-up for the job losses incurred from the Covid-19 pandemic. Adjusted for weekly payments, BankservAfrica’s data suggests that 1.072 million more salaries were paid into South Africans’ bank accounts in 2022 compared to the previous year.

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